Blue Line Express

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Weekend Update: Corn-Beans-Wheat-Cotton-Cattle-Hogs

Feb 11, 2018

CORN (March)

Last Week’s Close: For the week, March corn futures finished up 1 cent, trading in a range of 11 ½ cents. Friday’s Commitment of Traders report showed funds bought back 44,182 futures contracts which puts their net short at 84,872. Last week’s USDA report was relatively friendly in our mind, but the market couldn’t get any legs above our technical resistance pocket from 366 ½-369. This pocket represents a key retracement level, but more importantly the top end of the range in September and October. With December new crop near $4 we expect to see an uptick in producer activity. The chart is constructive but a pull back to 357-358 ½ would be welcomed as a buying opportunity on the first test. Please sign up for a Free Trial of our Grain Express to receive daily fundamentals along with our proprietary bias and technical levels.

SOYBEANS (March)

Last Week’s Close: March soybean futures finished the week up 5 ¼ cents, trading in a range of 28 ¼ cents. Friday’s Commitment of Traders report showed funds bought back 10,577 contracts, putting their net short at 12,565. Many market participants looked at the USDA as bearish, suggesting that we could have been trading 20 cents lower on the big carryout number. The bulls have weather concerns in Argentina to thank for the backstop. However, if rains materialize, we will likely see futures prices break down. From the technical standpoint, the market looks poised for a bigger move; chart watchers are waiting for a confirmation of a breakout or breakdown. 988 and 980 are the levels we are watching on a closing basis. Please sign up for a Free Trial of our Grain Express to receive daily fundamentals along with our proprietary bias and technical levels.

WHEAT (March)

Last Week’s Close: March wheat futures traded higher by 2 ¼ cents on the week, trading in a wide 25 ¾ cent range. Friday’s Commitment of Traders report showed funds bought back 13,276 futures contracts, putting the funds net short position at 78,256 futures. Last week’s USDA report was a little less than friendly in our eyes, but weather concerns in key growing areas have led to support and short covering from funds. We continue to keep a close eye on the Kansas City contract. The chart is constructive, first technical support for this week’s trade comes in from 438 ¾-441 ¾. Please sign up for a Free Trial of our Grain Express to receive daily fundamentals along with our proprietary bias and technical levels.

COTTON (March)

Last Week’s Close: March cotton traded .62 lower on the week, trading in a range of 2.17. Friday’s Commitment of Traders report showed that funds sold 14,489 contracts, putting their net long position at 81,887. Last week’s USDA report had a bearish undertone with Indian production down but an increase in China making up for some of that. Drought conditions in Texas are offering support to the market. 75.60 is the 50% retracement (middle of the range) from the August lows to the January highs, bulls must defend this level. The bulls still have a lot of work to do to close back above major resistance from 79.60-80.39. A failure to do so keeps the bearish head and shoulder pattern in play. Please sign up for a Free Trial of our Grain Express to receive daily fundamentals along with our proprietary bias and technical levels.

Live Cattle (April)

Last Week’s Close: April Live cattle finished Friday’s session up .025 at 123.75, trading in a wide range of 2.125. For the week, they finished down 2.125 trading in a range of 4.40. Cash trade for the week reported to be mostly at 126. Last week we had shifted our tone on cattle to being friendlier but looking for a pull back to be more aggressive. We got that pullback to first support from 122.55-122.95 on Friday and were working with clients to position accordingly. If this pocket cannot hold through the first half of the week we will look to reassess. Outside market volatility has been spilling over into the market which will also need to be monitored closely going forward. Markets consistently go up and down so its important to temper the expectations and take what the market gives you sometimes (accept the fact that you will leave something on the table 99% of the time). Please sign up for a Free Trial of our Livestock Roundup to receive daily fundamentals along with our proprietary bias and technical levels.

Feeder Cattle (March)

Last Week’s Close: March feeder cattle finished Friday’s session down .50 at 146.75, trading in a range of 3.625. For the week, feeders finished down 4.35, trading in a range of 7.75. As with the live cattle, we had started shifting our tone last week and were looking for a pullback to technical support as a buying opportunity. Those targets we laid out last week were achieved on Friday which came in at 146.45, 145.25. What we stated as "the last line of defense" managed to hold, that comes in from 143.50-144.00. The bulls need to take advantage of Friday’s price action, a failure to feed off of it to start the week will likely keep the bulls on the sidelines. Outside market volatility will likely continue to play a role in price action this week. It’s good to have a technical and fundamental bias in the markets, but keep your expectations tempered. You should be getting more bullish as prices retreat to support not test resistance. Price is what you pay, value is what you get. Please sign up for a Free Trial of our Livestock Roundup to receive daily fundamentals along with our proprietary bias and technical levels.

Lean Hogs (April)

Last Week’s Close: April lean hogs finished Friday’s session down .425, trading in a range of 1.05. For the week, they were down 4.775, trading in a range of 5.225. If you have been reading our daily livestock commentary you know we were leaning towards the short side, but this snowball lower exceeded even our expectations. The chart now resembles a technical graveyard for the bulls. If you have been short and have not reduced, we would recommend considering it. Last week on AgriTalk “After the Bell” and RFD-TV we talked about not wanting to catch a falling knife. If you want to be a buyer you now want to try and wait for 67.90 on the first test or wait and see the market close back above 69.70. Please sign up for a Free Trial of our Livestock Roundup to receive daily fundamentals along with our proprietary bias and technical levels.

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.